The value of Bitcoin has been rising since the war between Ukraine and Russia began. One possible reason for this boom is, according to some experts, that both Russia and Ukraine are buying digital money to avoid economic collapse and protect their economies.
“Traders believe that people in Russia and Ukraine are really behind the current Bitcoin rally,” says Naeem Aslam, chief analyst of AvaTrade, a foreign exchange (Forex) and contracts for difference (CFD) broker located in Dublin, Ireland.
Currently, the platform that evaluates the exchange rate of cryptocurrencies, Coinbase, lists one Bitcoin as equivalent to around 39,191 euros. According to Nigel Green of deVere Group (one of the world’s leading independent financial advisory firms), if there are no hiccups, BTC is likely to reach US$50,000 before the end of March.
However, the high value of this virtual currency may also fall due to the intention of the United States to ban it. The reason why Joe Biden’s government would want to make this decision is that Russians are the ones who are resorting more to buying cryptocurrencies to avoid international sanctions.
“A crucial factor to keep in mind, when it comes to the price of Bitcoin, is that if the US starts to see the Russians are using Bitcoin as a means to avoid sanctions, it is likely that they could push for coordinated action to ban the digital currency,” Aslam believes.
In fact, the AvaTrade expert believes that, if the US were to decide to ban the cryptocurrency, not only would its value fall in the short term, but there could be some pretty bad months ahead for existing investors.
Aslam explains that traders will need to keep an eye on how events unfold: “Banning Bitcoin under such a scenario will bring much greater volatility to the price. It can shake the entire financial market because many companies have massive balance sheet exposure to this asset.”